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The House and Senate, in their haste to stem the tide of the rapidly declining stock market, approved a bad bill that bails out Wall Street but does little to address the problems of ordinary citizens. (I am so never going to use the phrase “Main Street.”) While action certainly needs to be taken to protect our country’s financial system, throwing money at the problem will almost certainly not help. In fact, we stand a good chance of being put in an even worse situation if the companies being bailed out continue to operate and grow.
Any bill put together with such haste and urgency can never fully address the problem. The bailout bill is no exception. It took $150 billion of tax breaks for people who don’t need the money to entice the House to approve the bill, and it still fails to address the problems of under-regulation and corporate greed. It was a reversal of roles that democrats, not republicans, were the ones supporting big business. Unfortunately, republicans killed the original bill for the wrong reasons; they wanted less of the already insufficient oversight, and the fact that they caved after being bought off shows their true colors.
Sens. Obama and McCain, too, supported the bailout. Terrified of being accused of killing the economy, both urged their parties to vote for the bill. Most impressive, however, was McCain’s pivot from taking responsibility for the package to blaming House democrats for the bill’s failure. You can’t have it both ways, McCain; if you’re responsible for creating the bill, you’re equally responsible for its demise.
Of course, this is all a moot point, because it’s a bad bill. Our government should have resisted the urge to bail out the multi-billion dollar companies who so thoroughly screwed the American people. Instead of supporting the companies who caused the problems, our government should have allowed them to fail and instead supported smaller companies. This would do more to help local economies and in the long run would be better for the U.S. economy.
I know my plan sounds risky, but by letting these bloated finance companies succeed and allowing existing banks to further be consolidated into three or four big banks, the government is gambling our future. These banks will always be more interested in making money than providing a service, and in a few years, this country will find itself back in the same boat it is in now.
Existing loans need to be guaranteed. If, for example, Sallie Mae goes under, colleges will lose millions of dollars because Sallie Mae is the biggest guarantor of student loans. This obviously cannot happen. Instead, the government should buy all the loans from these overgrown companies and sell them to smaller banks. This would cut the major companies down to a manageable size, provide income and jobs in small communities and reduce monopolization.
Nothing will happen overnight and the economy might continue to move downward. However, a market adjustment after years of artificial growth driven by day traders and prospectors is long overdue, and the bill recently approved by Congress does nothing to address long-term concerns. A more comprehensive and better thought-out bill needs to be passed, or our country’s mortgage markets, and our economy as a whole, might never recover.
William P. Davis is a first-year journalism and violin performance major.
